[Federal Register Volume 71, Number 172 (Wednesday, September 6, 2006)]
[Rules and Regulations]
[Pages 52659-52664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-7410]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2005-TX-0033; FRL-8216-6]


Approval and Promulgation of State Implementation Plans; Texas; 
Highly Reactive Volatile Organic Compound Emissions Cap and Trade 
Program for the Houston/Galveston/Brazoria Ozone Nonattainment Area

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is approving revisions to the Texas State Implementation 
Plan concerning the Highly Reactive Volatile Organic Compound Emissions 
Cap and Trade Program for the Houston/Galveston/Brazoria ozone 
nonattainment area.

DATES: This rule is effective on October 6, 2006.

ADDRESSES: EPA has established a docket for this action under Docket ID 
No. EPA-R06-OAR-2005-TX-0033. All documents in the docket are listed on 
the http://www.regulations.gov Web site. Although listed in the index, 
some information is not publicly available, e.g., CBI or other 
information whose disclosure is restricted by statute. Certain other 
material, such as copyrighted material, is not placed on the Internet 
and will be publicly available only in hard copy form. Publicly 
available docket materials are available either electronically through 
http://www.regulations.gov or in hard copy at the Air Permitting 
Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue, 
Suite 700, Dallas, Texas 75202-2733. The file will be made available by 
appointment for public inspection in the Region 6 FOIA Review Room 
between the hours of 8:30 a.m. and 4:30 p.m. weekdays except for legal 
holidays. Contact the person listed in the FOR FURTHER INFORMATION 
CONTACT paragraph below to make an appointment. If possible, please 
make the appointment at least two working days in advance of your 
visit. There will be a 15-cent per page fee for making photocopies of 
documents. On the day of the visit, please check in at the EPA Region 6 
reception area at 1445 Ross Avenue, Suite 700, Dallas, Texas.
    The State submittal related to this SIP revision, and which is part 
of the EPA docket, is also available for public inspection at the State 
Air Agency listed below during official business hours by appointment:
    Texas Commission on Environmental Quality, Office of Air Quality, 
12124 Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: Adina Wiley, Air Permitting Section 
(6PD-R), EPA Region 6, 1445 Ross Avenue, Dallas, Texas 75202-2733, 
telephone 214-665-2115, <a href="/cdn-cgi/l/email-protection#94e3fdf8f1edbaf5f0fdfaf5d4f1e4f5baf3fbe2"><span class="__cf_email__" data-cfemail="7c0b15101905521d1815121d3c190c1d521b130a">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: Throughout this document wherever ``we,'' 
``us,'' or ``our'' is used, we mean EPA.

Outline

I. What action is EPA taking?
II. What is the background for this action?
III. What are EPA's responses to comments received on the proposed 
action?
IV. What does Federal approval of a State regulation mean to me?
V. Statutory and Executive Order Reviews

I. What action is EPA taking?

    EPA is approving the Highly Reactive Volatile Organic Compound 
Emissions Cap and Trade (HECT) Economic Incentive Program (EIP), 
published at Texas Administrative Code (TAC) Title 30, Chapter 101 
General Air Quality Rules, Subchapter H Emissions Banking and Trading, 
Division 6, sections 101.390-101.394, 101.396, 101.399-101.401, and 
101.403. These revisions were adopted by the Texas Commission on 
Environmental Quality (TCEQ) on December 01, 2004, and submitted to EPA 
on December 17, 2004, as a revision to the State Implementation Plan 
(SIP). As discussed in our proposed action at 70 FR 58144, we conclude 
that the HECT program is consistent with section 110(l) of the Clean 
Air Act. We proposed approval of the HECT program as an element of the 
Texas SIP for the Houston/Galveston/Brazoria (HGB) ozone nonattainment 
area on October 5, 2005 (70 FR 58138).

II. What is the background for this action?

    The HECT program was adopted as a state regulation on December 1, 
2004. The TCEQ developed the program as part of its mid-course review 
of the 1-hour ozone attainment plan for the HGB ozone nonattainment 
area. The mid-course review showed that ozone reductions comparable to 
those achieved by the 90 percent reduction in industrial nitrogen oxide 
(NO<INF>X</INF>) emissions and the enforceable commitments for an 
additional 42 tons per day of NO<INF>X</INF> reductions required in the 
November 2001 (66 FR 57160) approved SIP could be achieved through a 
combination of 80 percent reduction in industrial NO<INF>X</INF> 
emissions and additional targeted control of certain highly-reactive 
volatile organic compounds (HRVOCs). TCEQ has chosen to revise its 
attainment strategy accordingly, decreasing the emphasis on 
NO<INF>X</INF> control and requiring additional reductions of HRVOCs.
    In our proposed approval of the HECT program, we stated that final 
action on the HECT would not occur until we published final approval of 
the attainment demonstration, which is being processed concurrently 
with this approval. For a further discussion of the attainment 
demonstration and EPA's responses to comments on this action, please 
see our action on the attainment demonstration (EPA-R06-OAR-2005-TX-
0018), which is being published elsewhere in today's Federal Register.

III. What are EPA's responses to comments received on the proposed 
action?

    EPA's responses to comments submitted by Galveston-Houston 
Association for Smog Prevention (GHASP), Environmental Defense (Texas 
Office), the Lone Star Chapter of the Sierra Club, and Public Citizen 
(Texas Office) on November 4, 2005, are as follows. EPA has summarized 
the comments below; the complete comments can be found in the 
administrative record for this action (EPA-R06-OAR-2005-TX-0033). While 
the comments generally discuss VOC trading programs, we are only 
addressing comments specific to HRVOCs and the HECT. \1\
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    \1\ During the comment period, EPA did not receive comments 
regarding environmental justice and the HECT program. However, 
during the finalization process we have reevaluated our 
interpretation of the definition of Environmental Justice as found 
in Executive Order 12898. In our proposed approval of the HECT 
program, we stated that ``environmental justice concerns arise when 
a trading program could result in disproportionate impacts on 
communities populated by racial minorities, people with low incomes, 
or Tribes.'' On further review, we believe the following description 
is more consistent with E.O. 12898: ``Environmental justice concerns 
can arise when a final rule, such as a trading program, could result 
in disproportionate burdens on particular communities, including 
minority or low income communities.'' This revised language does not 
alter our determination that the HECT program does not raise 
environmental justice concerns.
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    Comment 1: The EPA uses the term ``less-reactive VOC'', but the 
TCEQ term ``other VOC'' (OVOC) is preferable. Some of the other VOCs 
are actually highly reactive on a molar basis, but are not emitted as 
widely or in as great a quantity as the designated HRVOCs.
    Response to Comment 1: We agree that the term ``other VOC'' (OVOC) 
will

[[Page 52660]]

more accurately define VOCs that are not categorized by TCEQ as highly-
reactive. We are using the term OVOC instead of ``less-reactive VOC'' 
in our final actions on the HGB attainment demonstration and associated 
rulemakings.
    Comment 2: There are problems with the inventory of VOC and HRVOC 
emissions in the HGB nonattainment area.
    Response to Comment 2: While EPA acknowledges that there have been 
past VOC emission inventory problems from sources associated with the 
petrochemical industry (see our proposed approval of the revisions to 
the HGB attainment demonstration, 70 FR 58119), EPA believes that the 
emission inventory developed by TCEQ for the HGB nonattainment area is 
an acceptable approach to characterizing the emissions in the HGB 
nonattainment area. In addition, we are incorporating by reference our 
responses to comments provided in our approval of the attainment 
demonstration for the HGB ozone nonattainment area (EPA-R06-OAR-2005-
TX-0018). Those responses more specifically address the commenters' 
concerns regarding the development and use of the imputed inventory, 
characterization of other VOCs in the inventory, and appropriate 
emissions monitoring techniques for flares, fugitive emissions, and 
upsets. Also, as will be discussed more fully in our responses to 
Comments 3 and 4, the implementation of the HECT and the associated 
monitoring and reporting requirements will serve to improve the 
emissions inventory for HRVOCs in the HGB nonattainment area.
    Comment 3: The VOC and HRVOC trading programs use unreliable data, 
which cannot be replicably measured. There are problems with current 
methods for measurement of HRVOC and VOC emissions; therefore, the VOC 
and HRVOC trading programs do not meet EPA's EIP Guidance for 
quantification.
    Response to Comment 3: EPA disagrees. The proposed HECT rule, at 70 
FR 58138, describes the basis for EPA's conclusion that the HECT rule 
satisfies the EIP Guidance (``Improving Air Quality with Economic 
Incentive Programs'' EPA-452/R-01-001, January 2001) criteria on 
quantifiability, which are found in Chapter 4 (``Fundamental Principles 
of All EIPs'').
    Emissions and emission reductions attributed to an EIP are 
quantifiable if they can be reliably and replicably measured: the 
source must be able to reliably calculate the amount of emissions and 
emission reductions from the EIP strategy, and must be able to 
replicate the calculations. Under the HECT program, sources address the 
element of quantification by using a quantification protocol that has 
been approved by TCEQ and EPA. Both agencies have important roles in 
ensuring these protocols provide reliable and replicable emission 
measurements. The approved quantification protocols for calculating 
annual HRVOC emissions for compliance with the HECT program are 
contained in sections 115.725 and 115.764 of 30 TAC Chapter 115, 
Control of Air Pollution from Volatile Organic Compounds. Additionally, 
VOC emission reduction credits (ERCs) that are eligible for conversion 
into HECT allowances must also be quantified using the monitoring and 
testing methods required in sections 115.725 and 115.764 and certified 
under the Emission Credit Banking and Trading program. The monitoring 
and testing protocols in sections 115.725 and 115.764 all require 
continuous monitoring systems; EPA considers continuous monitoring 
systems reliable and replicable (see Section 5.3(a) of the EIP 
Guidance). If the monitoring and testing data required under sections 
115.725 and 115.764 are unavailable, sources can calculate HRVOC 
emissions for HECT compliance during this time period through 
continuous monitoring data, periodic monitoring data, testing data, 
data from manufacturers, and engineering calculations. This measurement 
hierarchy agrees with the emission measurement protocol hierarchy that 
EPA recommends in the EIP Guidance (see Section 5.2(d)).
    Comment 4: TCEQ and EPA lack confidence in current methods for 
measuring emissions. This lack of confidence increases the risks 
associated with a market-based trading program, until the TCEQ is able 
to reconcile ambient monitoring with industry emission inventories. For 
example, trading could exacerbate the challenge of identifying the 
cause of any program failures because comparisons of ambient monitoring 
trend data to emission inventory data will require consideration of the 
timing and magnitude of trades.
    Response to Comment 4: EPA disagrees. We have discussed above in 
response to Comments 2 and 3 our conclusion that the methods used for 
measuring emissions under the HECT program are consistent with EPA 
policy and guidance, and that the emissions inventory developed by TCEQ 
is an acceptable approach to characterizing the emissions in the HGB 
nonattainment area. Further, to the extent there are concerns related 
to differences between ambient monitoring data and the HGB industrial 
emissions inventory, the operation of the HECT will serve to increase 
rather than decrease the level of certainty. Specifically, the use of 
approved quantification methods required under the HECT will extend 
monitoring to vent gas streams, flares, and cooling tower heat 
exchanges systems that might not have been adequately monitored before. 
Accordingly, accounting for actual emissions under the HECT--which is 
required of each source subject to this program--should improve the 
industrial emissions inventory.
    Comment 5: The EPA should find that it is premature for TCEQ to 
allow trading of unquantifiable emissions of VOCs in the HGB 
nonattainment area. If either the source or the recipient incorrectly 
estimates the emissions involved in a trade, the region is at risk of a 
net increase in emissions as a result of the trade. Until refineries 
and chemical plants are able to routinely quantify their VOC emissions, 
EPA should not allow trading of these VOC emissions.
    Response to Comment 5: EPA disagrees that VOC emissions should be 
ineligible for trading in the HGB nonattainment area. EPA believes that 
allowing the petrochemical industry to trade VOC emissions under the 
HECT program is appropriate because the TCEQ has made changes in 
regulatory requirements to require that certain sources of VOC 
emissions comply with continuous emissions monitoring requirements by 
the end of 2006. Additionally, as discussed in the EIP Guidance, we 
have concluded that cap and trade programs can be effective ways to 
reduce emissions, especially from large stationary sources. Each trade 
is part of a system designed to significantly reduce emissions of the 
pollutants subject to the cap. EPA also believes that allowing the 
petrochemical industry to trade HRVOC emissions under the HECT program 
is appropriate notwithstanding the commenter's concern about emissions 
estimates, because the HECT program satisfies the EIP Guidance criteria 
for quantification. In the HECT program, sources trading HECT 
allowances must quantify their emissions using the approved protocols 
in 30 TAC Chapter 115. The use of approved protocols ensures that 
sources correctly estimate their excess allowances or the amount of 
allowances needed to cover actual emissions. Additionally, TCEQ 
included a five percent safety margin in setting the overall level of 
annual emissions allowed under the HECT, which should produce a net 
annual average HRVOC

[[Page 52661]]

emissions decrease in the HGB nonattainment area below the level set by 
the cap.
    Comment 6: EPA should not approve the exclusion of emissions above 
the short-term limit from the annual cap if a trading program is 
approved.
    Response to Comment 6: EPA disagrees. We requested specific comment 
on this feature of the program because, as noted by us and the 
commenters, it departs from past practices with cap and trade programs. 
The commenters made one specific point in this regard, which we address 
in Comment 7. Our response to the more general comment follows.
    A key feature of the HGB attainment strategy is the two-part 
approach to HRVOC emissions. Routine HRVOC emissions are targeted and 
reduced through an annual cap-and-trade program, while the non-routine 
emissions from emission events, maintenance, start-up and shutdown are 
controlled through a short-term limit of 1200 lb/hour. When exceedances 
of the short-term limit occur, the hourly emissions above 1200 lb/hr 
are not counted toward compliance with the annual cap but are still 
subject to enforcement as a violation of the short-term limit. EPA 
expects that the root cause of the conditions giving rise to any 
particular exceedance of the short-term limit will be identified and 
corrected as expeditiously as practicable. The source is still required 
to use good air pollution control practices consistent with the 
applicable NSPS (40 CFR 60.11(d)) and MACT standards or other 
applicable Federal or State programs.
    TCEQ concluded that separating the two control elements was an 
appropriate means of protecting smaller sources subject to the HECT 
from depending on market availability of allowances or facing 
enforcement action if all emissions from an exceptionally large release 
exhausted their HECT allowances. Additionally, this separation of the 
annual cap and the short-term limit establishes a clear procedure for 
handling emissions during non-routine events. We believe the annual cap 
in conjunction with the short-term limit will achieve the goals of the 
attainment demonstration as indicated by TCEQ's modeling analysis. 
Please see our action and TSD on the attainment demonstration (EPA-R06-
OAR-2005-TX-0018) for further explanation.
    An additional advantage of separating these two control elements is 
that counting all emissions toward the annual cap could result in a 
loss of the incentives and cost-effectiveness associated with cap- and 
trade programs. In EPA's experience with cap and trade programs, some 
sources will always overcontrol emissions, which they in turn will most 
likely sell to other sources that cannot achieve such reductions 
without making greater expenditures. Through the functioning of the cap 
and trade market, reductions will tend to be made by the sources able 
to make them in the most cost-effective manner, and therefore the 
program will tend to promote the achievement of the maximum amount of 
emission reductions per dollar of resources expended.
    In the HGB area, however, an additional important factor is 
present, in that a significant number of sources have the potential for 
large emissions events or ``spikes.'' In such circumstances, if a cap 
and trade program counts all emissions towards the cap, then 
overcontrolling sources will tend to retain all of their reductions as 
insurance against the possibility of consuming their entire annual 
allowance through an unforeseeable emissions event. Therefore, eligible 
reductions will not be traded as allowances, which will impair the 
market function of the cap and trade program and thereby weaken its 
tendency to cost effectively achieve emission reductions. The two-part 
structure of the Texas program offsets this disadvantage.
    Comment 7: EPA's analysis suggests that the HECT program could lead 
to results that flout the intent of an EIP. An example would be a 
company that invests in efforts to dramatically reduce its routine 
HRVOC emissions below its annual cap, but fails to invest in efforts to 
reduce its risk of a major upset. This company could be the largest 
single emitter of HRVOCs in a year while also being a major seller of 
HECT allowances.
    Response to Comment 7: EPA disagrees. The proposed HECT rule, at 70 
FR 58143, describes EPA's analysis and our determination that, on 
balance, the HECT program is approvable. The intent of the HECT is to 
reduce routine emissions of HRVOCs. The scenario presented by the 
commenters actually supports the design of the HECT, in that the 
routine HRVOC emissions have been controlled because the company has 
been able to ``dramatically reduce'' these emissions below the 
facility's annual allocation level. The emissions associated with a 
major upset that are exempted from the annual cap (emissions above 1200 
lb/hr) would be violations of the short-term emissions limit and 
subject to enforcement. We believe that this two-part approach to 
control of HRVOC emissions recognizes the uniqueness of the HGB 
nonattainment area and is appropriate to demonstrate attainment. 
Additional information on our analysis of the attainment demonstration 
is available in the rulemaking docket for this action (EPA-R06-OAR-
2005-TX-0018).
    As noted in our proposed approval, the exemption of hourly limit 
exceedances from the annual cap is not provided for in EPA's EIP 
Guidance, but the scenario provided by the commenters is unlikely to 
occur. Based on the final HECT allocation scheme updated March 20, 
2006, the largest allocation is 441.9 tons. This allocation is 
approximately equivalent to 100.9 lb/hr, assuming the facility will 
operate with the allocation as an hourly average to represent routine 
emissions. Therefore, the largest HECT allocation will be approximately 
twelve times smaller than the 1200 lb/hr short-term limit. For every 
other source under the HECT, the disparity would be even greater. Based 
on this difference between the short-term limit and presumed routine 
emissions levels, no source would be able to operate at the hourly 
limit for an extended period of time without pushing its emissions 
total close to or above the annual cap--in which case it would not be 
able to sell allowances. Therefore, as discussed in our proposal, only 
truly non-routine emissions will exceed the hourly limit. Such 
exceedances are subject to enforcement as a violation of the 1200 lb/hr 
limit. Thus, two factors militate against the existence of the 
commenters' hypothetical high-emitting allowance seller: (1) The 
improbability of a source operating for long above the hourly limit 
without consuming a large part of its annual allocation, and (2) the 
fact that each time it did exceed the hourly limit, it could be subject 
to enforcement. Because we find that the result cited by the commenters 
is unlikely to occur, we continue to believe that the relative 
advantages and disadvantages of the structure of the HECT program 
support approval.
    Also, while the structure of the HECT and the HRVOC rules 
anticipates that emission events will not be completely eradicated, EPA 
believes that in combination these programs provide sufficient 
disincentives that sources will sufficiently reduce the frequency and 
magnitude of large emission events such that emission events would not 
be expected to impact peak ozone levels. The University of Texas report 
``Variable Industrial VOC Emissions and Their Impact on Ozone Formation 
in the Houston Galveston Area,'' April 16, 2004, estimated from 
historic

[[Page 52662]]

information that it is probable that at least one event will occur 
annually at a time and location to impact peak ozone. TCEQ determined, 
and EPA concurs, that it is therefore necessary to reduce the frequency 
of emission events so that emission events do not interfere with 
attainment of the 1-hour NAAQS, which only allows an average of one 
exceedance per year. Based on this study, we believe the hourly 
emission limit will achieve this goal. Because facilities would be 
expected to take action to avoid emission events exceeding the short-
term limit of 1200 lbs/hr, we anticipate that the frequency of such 
events in the future will be lower than in the past and on average less 
than 1 event per year impacting peak ozone should be expected. The 
University of Texas study also supports our belief that even if the 
scenario presented by the commenters does actually occur, it is 
unlikely to impact attainment of the 1-hour ozone NAAQS.
    Comment 8: If EPA approves the exclusion of emissions above the 
short-term cap from the annual cap, it should at least condition its 
approval on the TCEQ adopting a requirement that a company may not be a 
net seller of HECT allowances in the same year that it makes use of the 
exclusion.
    Response to Comment 8: EPA disagrees. The condition described by 
the commenters is not necessary to ensure that the HECT functions 
properly. As described in our response to Comment 7 above, it is 
unlikely that a source would be a net seller of allowances and also 
exempt emissions above the hourly limit from its annual cap.
    Comment 9: If EPA approves the HECT program as adopted by the TCEQ, 
EPA should commit to independently auditing the program annually during 
its first several years to determine whether implementation of the rule 
meets EIP Guidance.
    Response to Comment 9: EPA disagrees that an independent audit of 
the HECT is necessary. As proposed by EPA (70 FR 58138), the HECT does 
have a formal audit provision that provides sufficient oversight to 
identify and address potential areas of concern. The audit provision is 
in section 101.403(a) of the HECT rules and requires TCEQ to conduct an 
audit every three years, beginning in 2007. The audit will evaluate the 
impact of the program on the State's ozone attainment demonstration, 
the availability and cost of allowances, compliance by the 
participants, and any other elements the TCEQ Executive Director may 
choose to include. The TCEQ Executive Director will recommend measures 
to remedy any problems identified during the audit, including 
discontinuing allowances trading. The audit data and results must be 
completed and submitted to EPA and made available for public inspection 
within six months from the beginning of the audit. EPA will receive the 
audit reports and will have the opportunity through the SIP process to 
require any necessary changes. Additionally, facilities that do not 
have enough allowances to cover their actual HRVOC emissions during a 
control period will have their allowances for the next control period 
reduced by an amount equal to the emissions exceeding the allowances, 
plus an additional ten percent of the exceedance. Also, the TCEQ 
Executive Director has the authority to initiate enforcement actions if 
necessary to correct violations of the HECT program.
    The HECT audit provisions described above are consistent with EPA's 
expectations for evaluating the results of an economic incentive 
program (EIP), as outlined in section 5.3(b) of the EIP Guidance. 
Section 5.3(b) explains that an appropriate schedule for program 
evaluations is at least every three years, which coincides with other 
periodic reporting requirements such as those applicable to emission 
inventory requirements required by the CAA. EPA believes that the 
triennial HECT audit schedule and the required annual report (section 
101.403(b)) that summarizes all HECT trades completed in the most 
recent control period will be sufficient to ensure the HECT does not 
jeopardize the HGB area's attainment strategy.
    EPA's response to Texas Industry Project (TIP) comments made on 
November 4, 2005, is as follows:
    Comment: TIP supports EPA's proposed approval of the HECT program 
and urges EPA to finalize its approval as soon as practicable.
    Response: EPA acknowledges the support of TIP for our approval of 
the HECT program.
    EPA's response to comments made by the BCCA Appeal Group (BCCAAG) 
on November 4, 2005, is as follows:
    Comment 1: BCCAAG supports EPA's proposed approval of the HECT 
program and urges EPA to finalize its approval as soon as practicable.
    Comment 2: BCCAAG supports the establishment of a separate short-
term limit on HRVOC emissions, and the exclusion of short-term limit 
exceedances from the HECT program.
    Response to Comment 1 and 2: EPA acknowledges the support of BCCAAG 
for our approval of the HECT program and the specific feature of the 
HECT that allows exceedances of the short-term limit to be exempt from 
the HECT.
    We note that BCCAAG also submitted a set of comments on November 4, 
2005, that were specific to our proposed action on the revisions to the 
HGB attainment demonstration. On page 8 of this submittal, the 
commenter references the HECT, but gives no additional information 
relevant to our rulemaking on the HECT. We are addressing this separate 
BCCAAG submittal in our action on the attainment demonstration (EPA-
R06-2005-TX-0018).

IV. What does Federal approval of a State regulation mean to me?

    Enforcement of the State regulation before and after it is 
incorporated into the federally approved SIP is primarily a State 
function. However, once the regulation is federally approved, EPA and 
the public may take enforcement action against violators of these 
regulations.

V. Statutory and Executive Order Reviews

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is not a ``significant regulatory action'' and therefore is not 
subject to review by the Office of Management and Budget. For this 
reason, this action is also not subject to Executive Order 13211, 
``Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001). This action 
merely approves state law as meeting Federal requirements and imposes 
no additional requirements beyond those imposed by state law. 
Accordingly, the Administrator certifies that this rule will not have a 
significant economic impact on a substantial number of small entities 
under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because 
this rule approves pre-existing requirements under state law and does 
not impose any additional enforceable duty beyond that required by 
state law, it does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4).
    This rule also does not have tribal implications because it will 
not have a substantial direct effect on one or more Indian tribes, on 
the relationship between the Federal Government and Indian tribes, or 
on the distribution of power and responsibilities between the Federal 
Government and Indian tribes, as specified by Executive Order 13175 (65 
FR 67249, November 9, 2000). This action also does not have Federalism 
implications because it does not have substantial direct effects on the 
States,

[[Page 52663]]

on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government, as specified in Executive Order 13132 (64 FR 
43255, August 10, 1999). This action merely approves a state rule 
implementing a Federal standard, and does not alter the relationship or 
the distribution of power and responsibilities established in the CAA. 
This rule also is not subject to Executive Order 13045 ``Protection of 
Children from Environmental Health Risks and Safety Risks'' (62 FR 
19885, April 23, 1997), because it is not economically significant.
    In reviewing SIP submissions, EPA's role is to approve state 
choices, provided that they meet the criteria of the CAA. In this 
context, in the absence of a prior existing requirement for the State 
to use voluntary consensus standards (VCS), EPA has no authority to 
disapprove a SIP submission for failure to use VCS. It would thus be 
inconsistent with applicable law for EPA, when it reviews a SIP 
submission, to use VCS in place of a SIP submission that otherwise 
satisfies the provisions of the CAA. Thus, the requirements of section 
12(d) of the National Technology Transfer and Advancement Act of 1995 
(15 U.S.C. 272 note) do not apply. This rule does not impose an 
information collection burden under the provisions of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by November 6, 2006. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this rule for the purposes of judicial review nor does 
it extend the time within which a petition for judicial review may be 
filed, and shall not postpone the effectiveness of such rule or action. 
This action may not be challenged later in proceedings to enforce its 
requirements. (See section 307(b)(2).)

List of Subjects 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental 
relations, Nitrogen oxides, Ozone, Reporting and recordkeeping 
requirements, Volatile organic compounds.

    Dated: August 24, 2006.
Richard E. Greene,
Regional Administrator, Region 6.

0
40 CFR part 52 is amended as follows:

PART 52--[AMENDED]

0
1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7401 et seq.

Subpart SS--Texas

0
2. The table in Sec.  52.2270(c) entitled ``EPA Approved Regulations in 
the Texas SIP'' is amended under Chapter 101--General Air Quality 
Rules, Subchapter H--Emissions Banking and Trading, by adding in 
numerical order a new centered heading ``Division 6--Highly-Reactive 
Volatile Organic Compound Emissions Cap and Trade Program'' followed by 
new entries for sections 101.390, 101.391, 101.392, 101.393, 101.394, 
101.396, 101.399, 101.400, 101.401 and 101.403.
    The additions read as follows:


Sec.  52.2270  Identification of plan.

* * * * *
    (c) * * *

                                                        EPA-Approved Regulations in the Texas SIP
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      State approval/
            State citation                     Title/subject           submittal date            EPA approval date                   Explanation
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Chapter 101--General Air Quality Rules
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Subchapter H--Emissions Banking and Trading
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                  Division 6--Highly-Reactive Volatile Organic Compound Emissions Cap and Trade Program
--------------------------------------------------------------------------------------------------------------------------------------------------------
Section 101.390......................  Definitions.................           12/01/04  [Insert date of FR publication]
                                                                                         [Insert FR page number where
                                                                                         document begins].
Section 101.391......................  Applicability...............           12/01/04  [Insert date of FR publication]
                                                                                         [Insert FR page number where
                                                                                         document begins].
Section 101.392......................  Exemptions..................           12/01/04  [Insert date of FR publication]     ............................
                                                                                         [Insert FR page number where
                                                                                         document begins].

[[Page 52664]]

 
Section 101.393......................  General provisions..........           12/01/04  [Insert date of FR publication]
                                                                                         [Insert FR page number where
                                                                                         document begins].
Section 101.394......................  Allocation of allowances....           12/01/04  [Insert date of FR publication]
                                                                                         [Insert FR page number where
                                                                                         document begins].
Section 101.396......................  Allowance deductions........           12/01/04  [Insert date of FR publication]
                                                                                         [Insert FR page number where
                                                                                         document begins].
Section 101.399......................  Allowance Banking and                  12/01/04  [Insert date of FR publication]
                                        Trading.                                         [Insert FR page number where
                                                                                         document begins].
Section 101.400......................  Reporting...................           12/01/04  [Insert date of FR publication]
                                                                                         [Insert FR page number where
                                                                                         document begins].
Section 101.401......................  Level of activity                       2/01/04  [Insert date of FR publication]
                                        certification.                                   [Insert FR page number where
                                                                                         document begins].
Section 101.403......................  Program audits and reports..           12/01/04  [Insert date of FR publication]
                                                                                         [Insert FR page number where
                                                                                         document begins].
 
                                                                      * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------

[FR Doc. 06-7410 Filed 9-5-06; 8:45 am]
BILLING CODE 6560-50-P


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